The Economics of Scarcity and the UNC-Duke Basketball Game (with Michael Munger)

Today, on January 4th, 2026, EconTalk host Russ Roberts welcomes back Michael Munger for his 51st appearance on the show. The episode, scheduled to air on March 16th, 2026, marks the 20th anniversary of EconTalk, a significant milestone for the podcast. Russ Roberts acknowledges Michael Munger’s consistent contributions to the program, averaging two and a half appearances per year, and thanks him for his role in shaping EconTalk.

The conversation between Russ Roberts and Michael Munger delves into various topics, including emergent order, the power of prices, rationing mechanisms, the importance of community, and the legendary Duke-UNC basketball rivalry. As a faculty member at Duke University, Michael Munger provides insights into the intense rivalry between Duke and the University of North Carolina (UNC), highlighting the cultural significance of college basketball in North Carolina.

Describing the Duke-UNC rivalry as a clash between good and evil, Michael Munger emphasizes the emotional intensity surrounding the annual basketball game between the two universities. The demand for tickets to this highly anticipated matchup is incredibly high, leading to exorbitant prices on the secondary market. Michael Munger shares data from StubHub, revealing the steep prices for tickets to the game at Cameron Indoor Stadium, Duke’s iconic basketball venue.

Exploring the geographical proximity of Duke and UNC, located just nine miles apart, Russ Roberts and Michael Munger discuss the unique dynamics of the rivalry between the private institution (Duke) and the public university (UNC). Both individuals, with ties to UNC, acknowledge the deep-rooted emotions associated with the rivalry, characterized by a mix of respect and rivalry towards the neighboring institution.

The conversation shifts towards the distribution of tickets for the Duke-UNC game, highlighting the university’s efforts to prevent students from reselling their tickets. Michael Munger explains the stringent measures in place, such as requiring student IDs and wristbands for entry, to ensure that student tickets remain with the intended recipients. He recounts a past incident where a student attempted to sell his ticket on Craigslist for a significant sum, emphasizing the restrictions in place to maintain the integrity of the ticket allocation process.

As the discussion continues, Russ Roberts and Michael Munger explore the complexities of ticket distribution and the challenges faced by universities in managing high-demand events like the Duke-UNC basketball game. The conversation provides valuable insights into the intersection of sports, economics, and community dynamics, showcasing the enduring impact of college basketball rivalries on individuals and institutions alike. The system for distributing student tickets at Duke University is a fascinating phenomenon that has captured the attention of many. Unlike other universities, Duke has chosen not to charge a high price for student tickets, resulting in an enormous excess demand for these highly coveted seats. With only 1,200 seats available in the student section, but a student body of 6,000 undergraduates, competition for tickets to premium games like the North Carolina game is fierce.

Duke’s student section, Section 17, is considered the best seats in the house, located courtside across from the two teams. Sections 18 and 19 are reserved for organized groups, such as the band and graduate students, but are not as desirable as Section 17. Despite the limited number of tickets available to students, the demand remains high due to the premium seating and the intense rivalry between Duke and North Carolina.

In contrast, the system at the University of North Carolina relies on a lottery system to distribute student tickets, based on a random draw. Back in the 1970s, students at UNC used to camp out in the stadium to secure their seats for big games, creating a sense of excitement and camaraderie among the student body.

The unique system at Duke has been the subject of much discussion and analysis, with economists like Russ Roberts and Michael Munger delving into the intricacies of ticket pricing and allocation. Munger, in particular, draws parallels between Adam Smith’s concept of the “real price” of acquiring something and the cost of waiting in line for a cup of coffee at Starbucks.

Overall, the system for distributing student tickets at Duke University highlights the complexities of balancing supply and demand, while also fostering a sense of community and tradition among the student body. Despite the challenges and competition for tickets, the excitement and passion for college basketball at Duke and other universities continue to thrive. Scarcity is a concept that economists often grapple with, as it highlights the imbalance between the demand for a good or service and the available supply at a given price. When faced with scarcity, there are four main strategies that can be employed to allocate the limited resources effectively.

One approach is to raise the price of the good or service in question. This can help to reduce demand and ensure that only those willing to pay a higher price are able to access it. However, increasing prices can also lead to affordability issues for some individuals.

Another common method of addressing scarcity is through queuing, where goods or services are allocated on a first-come, first-served basis. This approach is often used by companies like Starbucks, where customers have to wait in line for their coffee. While queuing can be a fair way to distribute resources, it can also lead to long wait times and frustration for individuals.

A third option is to use chance or a lottery system to determine who receives the limited resource. This method ensures that everyone has an equal opportunity to access the good or service, but it may not always result in the most efficient allocation of resources.

The final approach is to use authority or discretion to decide who receives the resource. This method allows for more subjective criteria to be considered, but it also opens the door to potential discrimination or misuse of power.

At Duke University, a prestigious institution known for its high tuition fees and other costs, there is an interesting case of scarcity surrounding the Duke vs. UNC basketball game. Despite the high demand for tickets, Duke chooses to give them away for free, creating scarcity and competition among students.

The decision to give away tickets for free raises questions about how the university manages scarcity and allocates resources. While queuing is the current method used to distribute tickets, with students waiting in line for up to six weeks, there may be more efficient ways to allocate the limited resource, such as through a lottery system.

In conclusion, scarcity presents a complex economic challenge that requires careful consideration of the best allocation strategies. While raising prices, queuing, using chance, and exercising authority are all viable options, the most effective approach may vary depending on the specific context and goals of the organization. At Duke University, the decision to give away basketball tickets for free highlights the importance of thoughtful resource allocation and the potential benefits of exploring alternative methods to address scarcity. The scenario presented above raises some interesting questions about human behavior and incentives. In this case, we see a mix of people who are willing to go to extreme lengths to achieve a desired outcome. The first group consists of those who desperately want an A. They are willing to go to great lengths, including camping out overnight, to secure their spot in line. The second group consists of those who desperately want an A but may not be able to earn one through their own efforts. This group may resort to other means, such as cheating or manipulating the system, to achieve their goal.

The question of when people would arrive in line is an important one. In the case of the example given, showing up a few minutes before midnight would not guarantee a spot in line. Those who are serious about their goal would likely arrive much earlier to ensure their place in line.

The length of the line is another important factor to consider. In terms of people, the line is only five individuals long, as there is no point in being the sixth person. However, in terms of time, the line could be much longer. Those who arrive early may have to wait for hours or even days to achieve their goal.

The introduction of comfortable reclining chairs with massage features and access to a music library raises interesting questions about human nature. While this may make the waiting experience more enjoyable, it does not change the number of people in line. It simply changes how long they have to wait.

In the case of Duke University and the tradition of camping out for basketball tickets, we see how incentives and behavior can change over time. Initially, students were able to secure tickets easily and without much effort. However, as the team became more successful, the demand for tickets increased. This led to students camping out for days in order to secure their spot in line.

The decision to allow tents on campus changed the dynamics of the situation. Students no longer had to endure the elements while waiting for tickets. This led to an increase in the length of time students were willing to wait, with some staying for multiple nights in order to secure their spot.

Overall, the scenario presented raises important questions about human behavior, incentives, and the lengths people are willing to go to achieve their goals. It serves as a reminder that our actions are often influenced by the incentives and constraints we face in a given situation. K-Ville, the annual tenting tradition at Duke University, is a unique and ephemeral village that appears on campus every year for the Duke basketball season. Similar to the concept of Brigadoon, where a village only appears for one night every 99 or 100 years, K-Ville is a temporary community that exists for a short period of time before disappearing until the next year.

This year marks the 40th consecutive year of K-Ville, with the tradition starting in 1986 and continuing strong through 2026. Despite challenges posed by the COVID-19 pandemic in 2021, students were still able to participate in K-Ville, adapting to outdoor conditions to ensure safety while continuing the tradition.

The rules and conditions of K-Ville are entirely student-created, with a constitution, set of rules, police force, and appeals process established by the students themselves. The village is organized into different levels of tents—black, blue, and white—each with their own set of rules and regulations. To even have a chance at tenting, students must pass a rigorous exam that tests their knowledge of Duke basketball, with questions ranging from secret scrimmages to game scores.

The strictest rules apply to black tenting, which takes place from January 18th to January 28th. Blue tenting follows from January 28th to February 9th, and white tenting from February 14th to 28th. The rules become less severe as you move down the hierarchy, with white tenting being the least strict. However, all tents convert to white on February 14th, ensuring fairness among all participants.

The rationale behind the exam and strict rules is to maintain a meritocratic approach to tenting, where students are rewarded based on their dedication and knowledge of Duke basketball. This unique and student-driven tradition showcases the passion and spirit of Duke University students, coming together to support their basketball team and create lasting memories in the temporary village of K-Ville. One of my favorite jokes involves a young man who is determined to win the hand of the princess, who has many suitors vying for her attention. The king, facing a similar dilemma of how to choose the best suitor for his daughter, decides to administer a three-part exam to determine the most suitable candidate.

The first part of the exam requires the contestant to consume a large keg of ale within six minutes. The second test involves the removal of an abscessed tooth from a large tiger, and the third test, which is not suitable for all audiences, remains a mystery.

The joke highlights the idea that when resources are allocated using criteria other than money, such as exams or tests, you may attract a different type of candidate. In this case, the exam rewards individuals with specific skills, such as the ability to hold their liquor, handle dangerous situations, and perhaps other undisclosed abilities.

The discussion then transitions to the concept of pricing in the context of sports events, where tickets are often priced below the market-clearing price to attract the most devoted fans. The enthusiasm and support of these devoted fans can create a home crowd advantage and enhance the team’s performance.

The conversation also touches on the logistics of administering and grading the exam, as well as the importance of keeping the questions secret to prevent cheating or leaks. The exam is described as a loyalty filter, testing the candidates’ dedication and willingness to go above and beyond for a chance to win the princess’s hand.

The comparison is made to historical examples, such as China’s civil service exam, where candidates were tested on irrelevant skills like memorizing and writing classical poetry, to demonstrate their loyalty and dedication to the emperor.

In the end, the joke and discussion highlight the idea that unconventional methods of allocation, such as exams or tests, can reveal different qualities and characteristics in candidates, beyond just their financial resources. These methods can serve as loyalty filters, measuring the devotion and commitment of individuals in unique and unexpected ways.

Russ Roberts: It’s amazing to think about the dedication and commitment that these students have to go through just to secure a spot in line for a basketball game. The level of organization and discipline required is truly impressive.

Michael Munger: Absolutely. It’s a testament to the passion and loyalty that fans have for their team. The fact that they are willing to endure such hardships just to support their school is remarkable.

Russ Roberts: And the role of the line monitors is crucial in maintaining order and fairness in the process. It’s fascinating to think about the dynamics of the line and how it is managed to prevent cheating and ensure that everyone gets a fair chance to secure a spot.

Michael Munger: It’s a fine line between maintaining order and preventing abuse of the system. The fact that there are strict rules in place and consequences for those who try to cheat shows the seriousness with which this tradition is taken.

Russ Roberts: The story about the color televisions in Chile is a perfect example of how price controls can lead to unintended consequences. It’s a cautionary tale about the dangers of interfering with market forces and the importance of allowing prices to reflect supply and demand.

Michael Munger: Absolutely. It’s a reminder that market mechanisms are often the most effective way to allocate resources and prevent abuses. The K-Ville line may seem like a trivial example, but it highlights the broader principles of economics and how they can be applied in various contexts.

Russ Roberts: Overall, the K-Ville line is a fascinating case study in human behavior, economics, and the power of tradition. It may not be perfectly correlated with other phenomena, but it offers valuable insights into the nature of competition, loyalty, and the lengths people will go to support their team.

Michael Munger: It’s a unique tradition that showcases the passion and dedication of Duke fans. The fact that students are willing to endure such hardships just to secure a spot in line is a testament to the strong sense of community and camaraderie that exists at the university.

Russ Roberts: And the fact that there are consequences for those who try to abuse the system shows the importance of maintaining integrity and fairness in all aspects of life. The K-Ville line may be just a small part of college basketball culture, but it serves as a powerful reminder of the values that we hold dear.

Overall, the K-Ville line is a unique and fascinating phenomenon that offers valuable lessons for students, fans, and economists alike. It may not be perfectly correlated with other things that are easily measured, but it provides important insights into human behavior, tradition, and the power of competition. As Duke fans continue to camp out in K-Ville year after year, they are not just waiting for a basketball game – they are upholding a tradition and a legacy that has been passed down for generations.

The phenomenon of Duke University’s K-Ville, the tenting tradition that precedes the Duke-UNC basketball game, is a fascinating example of emergent order and self-governance among students. In a recent conversation between Russ Roberts and Michael Munger, they delve into the intricacies of this student-led system and its parallels to other forms of emergent order, such as prison constitutions.

Munger explains that the rules and regulations that govern K-Ville are entirely student-generated and voluntarily followed. The students themselves have established a complex system of tenting, ticket distribution, and enforcement designed to ensure fairness and order in the lead-up to the big game. This includes rules about tent colors, attendance requirements, and grace periods for inclement weather or basketball games.

One of the most interesting aspects of K-Ville is the role of enforcement within the student community. Just as in Skarbek’s study of prison life, where inmates enforce their own rules and justice against their fellow prisoners, Duke students take on the responsibility of policing their own community. This internal enforcement mechanism ensures that the rules are followed and that justice is served within the student body.

Munger also points out the parallels between the student-led order in K-Ville and the delegated authority of prison guards who allow prisoners to govern themselves to a certain extent. The administration at Duke recognizes the importance of student involvement and self-governance in maintaining order and tradition during the tenting process.

Overall, the example of Duke’s K-Ville tradition serves as a fascinating case study of emergent order and self-governance in a unique and high-stakes environment. By delegating authority to the students themselves, Duke has created a system that fosters community, tradition, and fairness in the lead-up to one of the most anticipated basketball games of the year. At Duke University, there is a unique tradition known as K-Ville where students camp out in tents for weeks in advance to secure tickets to the highly anticipated Duke vs. North Carolina basketball game. This tradition has sparked discussions about the role of student decision-making and administration approval in creating these unique experiences.

Economist Russ Roberts and Duke professor Michael Munger delved into the dynamics of K-Ville and the significance of student-led initiatives. Munger emphasized that in equilibrium, the administration has no say in the decisions made by students in K-Ville. While the administration may have the authority to intervene, they often choose to remain hands-off and allow the students to organize themselves.

Roberts shared his perspective as someone who had to choose between attending Duke and North Carolina, ultimately opting for North Carolina. Despite his allegiance to the Tar Heels, Roberts acknowledged the dedication and enthusiasm of Duke students in K-Ville, particularly the Cameron Crazies in Section 17. He expressed empathy for the students who endure the challenging camping experience as a rite of passage to secure tickets to the game.

Munger highlighted the transformative impact of the K-Ville experience on students, noting that those who participate in tenting often form lasting bonds and demonstrate higher levels of engagement with the university. While some may question the financial implications of leaving millions of dollars on the table by not auctioning off tickets, Munger argued that the sense of camaraderie and loyalty fostered through K-Ville contributes to long-term support for Duke University.

The conversation also touched on the closed nature of sports leagues and the scarcity of seats in high-demand events like the Duke vs. North Carolina basketball game. As the value of stadium seats continues to rise, the exclusivity of these events adds to their allure and creates a sense of prestige among attendees. This phenomenon reflects the broader trend of limited access to elite experiences in a society where wealth and demand for luxury goods are on the rise.

Overall, the discussion highlighted the complex interplay between tradition, student autonomy, and institutional dynamics in shaping unique cultural practices like K-Ville at Duke University. While the tradition may seem unconventional to outsiders, its significance to the Duke community and its role in fostering school spirit and camaraderie cannot be understated.

He has achieved unparalleled success and has left a lasting impact on the game of basketball. His dedication, passion, and leadership have inspired countless players and fans alike. Despite our rivalry with Duke, I can’t help but admire the legacy that Coach K has built.

So, in conclusion, while bootcamp may be tough and demanding, it creates a sense of community and camaraderie that is truly special. And, even in the midst of intense rivalries like Duke vs. UNC, there is a mutual respect for the dedication and excellence that both teams embody. So, let’s put aside our differences, celebrate the bonds that sports create, and appreciate the beauty of competition.

College sports have a long and storied history, filled with legendary coaches and incredible achievements. One coach who stands out among the rest is renowned for his consistent success, commitment to academic excellence, and lack of scandal. His players not only excelled on the field but also graduated with degrees in hand.

When you look at the number of his players who have gone on to successful professional careers, it’s almost unprecedented. This coach has truly made a lasting impact on the world of college sports. Despite his undeniable talents and accomplishments, there are some who will always dislike him.

Russ Roberts recently had the opportunity to sit down with the one and only Mike Munger to discuss this legendary coach. Munger shared his thoughts on why he believes this coach is the best in the history of college sports. Their conversation shed light on the coach’s remarkable career and the lasting legacy he has left behind.

It’s clear that this coach’s impact goes far beyond the wins and losses on the field. His dedication to developing not only great athletes but also well-rounded individuals has set him apart from his peers. His ability to consistently produce successful professionals is a testament to his coaching prowess.

While some may not be fans of this coach, there’s no denying the impact he has had on the world of college sports. His legacy will continue to inspire future generations of athletes and coaches for years to come. As we look back on the history of college sports, it’s clear that this coach’s name will always be remembered as one of the best to ever do it. The world of technology is constantly evolving, with new innovations and advancements being made every day. One such advancement is the development of artificial intelligence, or AI. AI is the simulation of human intelligence in machines that are programmed to think and learn like humans.

One of the most exciting areas of AI development is the field of natural language processing, or NLP. NLP is a branch of AI that focuses on the interaction between computers and humans using natural language. This technology is used in a variety of applications, such as virtual assistants like Siri and Alexa, chatbots, and language translation services.

One of the key challenges in NLP is the ability to understand and interpret human language accurately. This involves not only understanding the words themselves, but also the context in which they are used, as well as the nuances of human communication such as sarcasm and humor. Despite these challenges, significant progress has been made in recent years, with NLP algorithms becoming increasingly sophisticated and accurate.

One of the most notable advancements in NLP is the development of transformer models, which have revolutionized the field. Transformer models are neural networks that are able to process and generate text in a way that is more accurate and efficient than previous models. These models have been used to develop state-of-the-art language models such as GPT-3, which is capable of generating human-like text and answering complex questions.

Another important development in NLP is the use of pre-trained language models. These models are trained on large amounts of text data, allowing them to learn the nuances of human language and improve their performance on a wide range of tasks. By fine-tuning these pre-trained models on specific datasets, researchers and developers can create highly accurate and effective NLP systems for a variety of applications.

In addition to transformer models and pre-trained language models, researchers are also exploring new techniques such as transfer learning and multi-task learning to improve the performance of NLP systems. Transfer learning involves training a model on one task and then transferring its knowledge to another task, while multi-task learning involves training a model on multiple tasks simultaneously to improve its overall performance.

Overall, the field of natural language processing is rapidly advancing, with new technologies and techniques being developed to improve the accuracy and efficiency of AI systems. As these advancements continue, we can expect to see even more sophisticated and powerful NLP applications in the future, revolutionizing the way we interact with technology and each other.